Portsmouth’s projected deficit for 2015 nearly $2M

PORTSMOUTH — A grim budget picture was painted by members of the Town Council and School Committee during a rare joint meeting Saturday morning.

Saturday’s meeting was a rare joint meeting of the Town Council and School Committee. From left are Town Council member David Gleason, Town Clerk Joanne Mower, School Committee member Frederick Faerber, council member Keith Hamilton, committee member Emily Copeland, council member Molly Magee, committee member Thomas Vadney, Committee Chairman David Croston, Council President James Seveney, committee member Terri Cortvriend, council member Michael Buddemeyer, committee member John Wojichowski, council member Elizabeth Pedro, committee member Andrew Kelly, Interim School Supt. Barbara McGann, Town Administrator John Klimm, school Finance Director Chris DiIuro and town Finance/Personnel Director James Lathrop.

Unless savings or new revenue streams are found during the budget review process in the coming months, the town’s projected total deficit for fiscal year 2015 stands at about $1.96 million. Of that shortfall, the schools are projecting a deficit of about $1.075 and the town, $885,000.

All sides agreed it’s critical they work together and take a longterm approach to the town’s budget problems. “We absolutely cannot take the position that we’ve got a one-year problem,” said Town Administrator John Klimm.

Council member Elizabeth Pedro said she also hopes taxpayers will provide input on the budget. “We need to do what the citizens want us to do,” she said. (Only three residents attended Saturday’s meeting.)

School Finance Director Chris DiIuro, presenting a draft budget for 2014-15 that assumes a 2.4 percent increase in the town’s appropriation, said the schools are expecting to lose about $531,000 in local revenue next year — nearly a 25 percent decrease. Of that amount, about $246,000 represents a reduction in state aid under the governor’s budget.

While state aid is cut back every year, expenses are going up; a $1.05 million increase (2.7 percent) is projected for the schools this year.

“It is a recipe for disaster,” said School Committee Chairman David Croston. “The state aid formula mistakenly assumes that Portsmouth can afford more … and we’re not alone.”

Committee member John Wojichowski agreed, saying the state is essentially telling Portsmouth citizens that they’re wealthy and need to pay more taxes. That’s why the town “gets creamed” every year with the funding formula, he said.

Mr. DiIuro presented several strategies for eliminating the deficit. One was to seek new revenue such as a larger appropriation from the town, refining the Little Compton tuition estimate based on expected enrollment and renting out school facilities more. He also said the district could use a fund balance from a previous year, but this would be a one-time fix that doesn’t solve the operating deficit.

Mr. DiIuro also presented several cost-saving measures, including refining the health care cost estimate; working with building administrators to reduce discretionary spending; pursuing cost reductions in transportation, utilities and other large budget line items; and eliminating an estimated 12 staff positions.

Teacher positions discussed

The latter recommendation, committee members said, would be the most painful option.

A good portion of Saturday’s meeting was spent talking about the School Committee’s Feb. 12 vote to issue 71 non-renewal notices to teachers. Under state law, school boards must notify teachers by March 1 that they may be laid off. As the budget picture becomes clearer, the majority of layoff notices are usually recalled.

School officials, however, are strongly considering the elimination of 12 positions in order to save about $650,000 in next year’s budget. At the Feb. 12 meeting, about 25 teachers and students spoke out against any cuts in music or the arts, which they feared would be targeted first.

That meeting was “sobering,” Mr. Croston said. “It basically had us talk about how we needed to bring our expenses in line with revenue,” he said.

Mr. Wojichowski said he was against eliminating any staff positions. “Up until a week ago, being on the School Committee was fun for me,” said Mr. Wojichowski, adding that going into a vacation week, 71 teachers are “feeling like they’ve been punched in the gut.”

Cutting 12 staff positions, he said, could mean “the elimination of robotics class at the middle school” or teachers who intervene with struggling students, he said.

Committee member Andrew Kelly, who said he wanted the district to retain its existing arts program, advanced placement courses and athletics, also opposed any staff reductions.

Committee member Frederick Faerber warned, however, that the potential elimination of 10 to 12 teachers is only a “prelude” toward more layoffs in the future. “It’s a pretty grim outlook, unless something’s done to correct the revenue picture,” he said.

Committee member Thomas Vadney said the School Department needs to be downsized. He said the district has lost 10 percent of its students in the last decade, but the department’s size has remained the same.

“It’s not a nice thing to do (but) it should have been done 10 years ago, when we had a downsize in the population,” said Mr. Vadney.

Ms. Pedro said she found it odd that the school district was going to spend about $1.8 million of its fund surplus on athletic field upgrades — the “T3 Project” — at the high school.

“You’re talking about laying off 12 positions but you’re spending $2 million for a turf field,” said Ms. Pedro. “I think it’s excessive.”

Mr. Croston, however, said the surplus funds cannot be used to fix an operational deficit. The track and tennis courts, he added, are on the verge of being unacceptable for Rhode Island Interscholastic League competition.

“I think this investment is absolutely critical,” he said.

Town’s side

Mr. Klimm presented the town’s draft budget, which assumes a 2.4 percent increase in the tax levy, but cautioned there are still many unknowns on the municipal side. “We’re right in the middle of arbitration with two of our unions,” said Mr. Klimm, telling School Committee members that the town is also “about a month or more behind you” in the budget process.

Although revenue for the town is expected to remain roughly the same, expenditures are forecasted to increase in the form of contracted salaries, health insurance, legal fees, debt service, restoration of prior staff cuts and more, he said.

Council President James Seveney said there are many challenges facing the town, including higher legals costs and the issue of the broken wind turbine.

“Anybody see that move lately? We’ve got to fix that,” Mr. Seveney said, adding later, “On top of all this we have a snowstorm coming. My understanding is that we’re almost out of salt.”

After presenting several strategies for eliminating the deficit, Mr. Klimm spoke about the town’s need to change its approach in budgeting for the future. The town could address the problem by taxing its way out or drastically cutting the budget — both “absurdities” in Portsmouth, he said

Instead, Mr. Klimm proposed a “tectonic shift” in the way the town delivers its services and urged more collaboration with other towns to save money. He also praised school leaders for “thinking outside the box” in looking for new revenue streams. The town needs to do the same, he said.

“We know we have to be more aggressive with pursuing grant opportunities,” he offered as one example. Mr. Klimm credited council member Molly Magee for spearheading an effort to seek more revenue for the town.

Despite the dire budget forecast, both sides agreed that a collaborative effort is needed to address the shortfalls in the spending plan.

“This is not the time for politics,” said Mr. Croston, who added that it’s essential that officials run the town like a business by working together. “We will come through this, and we will be stronger. This is a great start.”

Larry Fitzmorris of the citizen watchdog group Portsmouth Concerned Citizens applauded the two sides for their collaborative efforts, but said an opportunity was missed by not combining the positions of town and school finance directors. James Lathrop, who has previously served as a school finance director, was recently hired as the town’s finance/personnel director.

“We could have easily consolidated the positions,” Mr. Fitzmorris said.